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Standard scraps GPP clawback as battle for IFAs intensifies

Standard Life is axing conventional clawback under its new mono-charging group personal pension contract.

IFAs believe the move will be copied by other providers in the fight for the IFA channel.

Under Standard&#39s recently announced single-charging structure, IFAs will only be stung by clawback of commission if the entire fund is transferred within the first three years.

Traditionally, IFAs expect to have to return their commission to life offices if there is a break in contributions or if contributions are reduced but Standard Life is goinga step further.

The company grabbed the headlines earlier this month by slashing charges for its existing and new personal pensions, typically reducing charges on contracts by 0.6 per cent.

Assistant general manager (marketing) Colin Ledlie says: “We are moving away from clawback if the member stops contributing for a while. The new system is more flexible and less complicated.

“We need to maintain some element of clawback. It is good news for us administratively and it is good news for IFAs. Nobody else has got a system like this and we are hoping they will be looking at the move with interest.”

Torquil Clark pensions development manager Tom McPhail says: “It is becoming an increasingly desperatebattle for the market.

“I think that other life offices are likely to follow the move but it is a terrific gamble and it could end up costing the big boys hugely.”

Barclays has also come out fighting for the stakeholder market with the dramatic move of offering a nil-charging stakeholder for the first year, then an annual tiered annual management chargeof between 0.25 per centand 1 per cent, depending on the fund size.

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